Shutdown or not, health insurance markets open today

October 1, 2013 9:43:36 AM

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CHICAGO -- Millions of Americans will be able to shop for the first time today on the insurance marketplaces that are at the heart of President Barack Obama's health care reforms, entering a world that is supposed to simplify the mysteries of health coverage but could end up making it even more confusing, at least initially.

Whether consumers will be pleased with the experience, the premiums and the out-of-pocket costs of the plans offered to them will finally start to become clear. Today's rollout comes after months of buildup in which the marketplaces, also known as exchanges, have been both praised and vilified.

Illustrating the heated political disagreements over the law, the opening of the exchanges comes the same day as the shutdown of the federal government, led by congressional Republicans who want to block the health insurance reforms from taking effect.

The shutdown will have no immediate effect on the insurance marketplaces that are the backbone of the law, because they operate with money that isn't subject to the annual budget wrangling in Washington.

The marketplaces opening in all 50 states represent a turning point in the nation's approach to health care, the biggest expansion in coverage in nearly 50 years.

The Obama administration hopes to sign up 7 million people during the first year and has a goal of eventually signing up at least half of the nearly 50 million uninsured Americans through an expansion of Medicaid or government-subsidized plans.

But if people become frustrated with predicted glitches in the computer-based enrollment process and turn away from the program, the prospects for Obama's signature domestic policy achievement could dim.

"The promise of the law is that no one will go bankrupt because of medical bills," said Neera Tanden, president of the Center for American Progress, which helped work for passage of the law. "It won't happen in the first day or the first year. But when the law is fully operational, it will provide an economic benefit to roughly 30 million Americans."

Tanden cautioned against rushing to judge the marketplace's success on its first-day performance. Numerous observers have predicted bugs and setbacks. Trained outreach workers in many states are having trouble getting the certification they need to start helping people enroll.

Many states are predicting that people will initially test the online application system but actually sign up closer to Dec. 15, which is the deadline for coverage to start Jan. 1. Customers have until the end of March to sign up in order to avoid tax penalties.

A look at some of the major aspects of the ACA:

ESSENTIAL HEALTH BENEFITS

Under the law, health insurers must cover 10 essential benefits. This will make health plans more costly, but also more comprehensive. Starting next year, the rules will apply to all plans offered to individuals or through the small-group market to employers with 50 or fewer workers. The essential-benefits requirement does not apply to plans offered by larger employers, which typically offer most of these, already.

People will be able to pick from insurance plans with differing levels of coverage and varying costs for co-pays and premiums. But insurers will have to cover a certain percentage of the services' cost.

PRE-EXISTING CONDITIONS

This is a major change under the law. Starting in 2014, most plans -- whether obtained through an employer or on the marketplace -- cannot deny coverage or charge more money because of a pre-existing health conditions.

However, if you have what is known as a grandfathered individual plan -- a plan you buy yourself that was in existence before March 23, 2010, and has remained unchanged -- then this rule would not apply. So check the details on your plan and consider shopping around.

OUT-OF-POCKET SPENDING/LIFETIME LIMITS

Under the law, the amount of money people will have to pay out-of-pocket each year for medical and prescription drug costs will be capped at $6,350 for individuals and $12,700 for a family. These limits are separate from the monthly premiums people pay. The limits take effect in 2014 for those buying insurance on the state health insurance exchanges. For those with employer-based coverage, the restrictions will be fully in place in 2015.

In addition, most insurance plans will be prohibited from setting lifetime cost limits on coverage for essential health benefits.

AGE 26

One popular provision of the health care law already is part of most insurance plans -- allowing young people to stay on their parents' insurance plans until age 26. This also covers dependents, including step-children, adopted children and some foster children. This benefit will be required of all plans that provide dependent care. Starting in 2014, younger people can remain on a parent's or caregiver's plan even if they have an employer option of their own.